LANSING – Manufacturers using larger amounts of power could all see new electric rates under legislation under discussion in the House Energy and Technology Committee.

The bill (HB 5476 ) is designed to replace the E1 rate currently provided to Hemlock Semiconductor with a new rate-setting system that recognizes the lower cost of providing power to high-use, steady demand industrial customers, supporters said.

House Majority Floor Leader Jim Stamas (R-Midland), sponsor of the bill, said the bill also sets out deadlines for various steps in the process to be sure there is a new industrial rate in place when the current rate for Hemlock expires December 1, 2015.

“This actually gives the Public Service Commission the ability to go and look at the overall picture and say what is the proper rate,” Stamas said. “Instead of being for one entity, it would be for all of whatever they set.”

Stamas said the process could actually result in lower rates for all customers by better allocating actual costs to all classes.

Valerie Brader, Governor Rick Snyder’s energy advisor, said it was likely the Public Service Commission already had the authority to consider the points set out in the legislation, but he said the bill would ensure there are no legal challenges.

One of the goals, she said, is to bring Michigan’s industrial electric rates more in line with those in neighboring states. The bill expands the rate system to all utilities, not just Consumers Energy, which serves Hemlock, she said.

“One thing very large users have is a very smooth demand,” Brader said. “If we can structure a rate that rewards that and recognizes that they’re cheaper to serve, and it’s cheaper for everybody.”

Brader said the change will be particularly important given the coming federal emissions regulations that could cause some of the state’s baseload power plants to be retired in 2016.

Andy Coulouris with Hemlock said the company is expecting to pay something more for power after the E1 rate expires, but he said the tax credit the company could claim erases about half of that increase. The new rate developed under the bill, he said, is hoped to offset an additional portion of that increase.

Coulouris said the change would not discourage the company from seeking to reduce its power use. Hemlock competes globally in selling its materials and so is always working to reduce its costs, he said.

This story was provided by Gongwer News Service. To subscribe, click on Gongwer.Com